It is time for India to raise its ambitions to a million start-ups and 10 million jobs in the next five years
By Saurabh Srivastava
On January 19, an Indian start-up cricket team showed the world what start-ups are capable of. A team bereft of established strike bowlers and star batsmen did the unimaginable! More important, where such an occasion would have overawed a regular team, this one didn’t shy away from the challenge. The freshman players had no reputation or team position to lose if they went for broke. And, so they upended all expectations.
This is why start-ups are critical and highly valued in successful economies like the US, Israel and elsewhere. To compete with established players and survive, they must necessarily innovate. In the process, they create solutions which are transformational and address society’s unmet needs. They are also the largest creators of jobs. Based on a 40-year study in the US, the respected Kauffman Foundation found that net new job growth came only from start-ups. For India, which needs to create 10mn jobs annually, start-ups are clearly what the doctor ordered.
That is why PM Narendra Modi’s recognition of start-ups’ potential for economic growth and employment was so welcome and timely. It was the first by any government since 1947. The PM has led from the front with the launch of Start-up India in 2016. A slew of enabling measures by the government have propelled India into the top 3 start-up nations. India is projected to have 60,000 start-ups and 100 Unicorns by 2025.
The PM’s judgement and faith were more than vindicated when Covid-19 struck. Six months ago, we were importing everything—ventilators, HFNC’s(high flow oxygen machines), test kits masks, sanitisers… Today we are not exporting. The government played an extremely enabling role, but our start-ups proved their mettle. A total of 11 Unicorns emerged in Covid times in the last 12 months, and 2021 saw its first Unicorn already. The current total stands at 37, a growth of 33% over 2019! Clearly, start-ups will be the cornerstone on which “ Atmanirbharta” will be built!
We now need to raise our aspirations to be next only to the US in the start-up world. And while US start-ups lead in innovations and solutions for the world’s top 1bn (by income), India can lead for the next 6bn. In due course, this will disrupt the top 1 bn and give us a chance to take the top spot. The process has already begun. Start-ups are building innovative solutions to address challenges in affordable healthcare, education, agricultural productivity, cleantech and a lot more.
Indians have been very successful overseas, creating scores of billion-dollar companies and also heading the most valuable and respected global corporations—Google, Microsoft, IBM, Deloitte, Adobe, etc. Indeed, the world is rolling out the red carpet for Indian managers, entrepreneurs and start-ups. We must ensure that our best and brightest in India and worldwide try to achieve their dreams in India. This will need a few more enabling policy measures beyond the existing ones in areas like unleashing more domestic capital & encouraging more foreign capital for start-ups, capital gains tax parity with listed companies, changes in ESOP rules, incentivising domestic and foreign VCs to register with Sebi, some reforms in RBI/MCA rules.
We should learn from the best practices of successful countries and build on them to create global next practices to take leadership. We need to skillfully carve out and unshackle this area, while we may still need regulations for others by taking a leaf out of our own book. The Indian software industry was only $100mn when a trimurti of exceptional and visionary bureaucrats realised it’s potential and, in partnership with industry, N Vittal, N Gopalaswamy and Roy Paul, co-created the Software Technology Park Scheme. STPI solved the telecom bandwidth problem, created virtual SEZs where industry built its own infrastructure, took away the government’s burden and created world-class campuses that are world’s envy. And the leap of faith in granting 100% tax exemption to an industry exporting intangibles (and hence so vulnerable to black money) paid rich dividends. This industry, comprising mostly start-ups (TCS is an exception), snatched global leadership in less than three decades, is around $200bn today, accounts for 25% of forex earnings, employs 15mn people and has built the brand of New India.
It is time for India to move from being the back office of the world to the front office, raise its ambitions to a million start-ups and 10 million jobs in the next five years and, in addition to “ Atmanirbharta”, add “Sansar Nirbharta on India” to its lexicon. There’s no reason why India’s number one position in test cricket can’t be replicated in the start-up world.
The author is Co-founder NASSCOM, IAN, TIE. Views are personal